Missouri - lowest tobacco tax in the nation with no increase in sight...

June 9, 2010 - On May 13, 2010 the South Carolina raised the cigarette tax by 50 cents a pack, ended the Palmetto State's status as having the lowest cigarette tax in the nation. Missouri now is the disgrace of the nation with the lowest cigarette tax at 17 cents per pack.(South Carolina - cigarette tax raised 50 cents to 57 cents/pack..) The State of Missouri deprives surrounding state governments of tobacco tax revenue it would get if its residents bought the cigarettes in their state.

Missouri lawmakers this year made deep cuts to the state budget that takes effect next month. They had to slash money for many social services and for various education programs, including Parents as Teachers and Career Ladder. Governor Jay Nixon has indicated he may slice up to $350 million more when he signs the budget into law.

Fellow Democrats have proposed ways to keep the budget-cutting knife out of Nixon's hand by enhancing revenue. One common suggestion is raising Missouri's cigarette tax, but that's not as easy as it sounds. Holding the line on taxes has been one of the few things that Democratic Governor Jay Nixon and the GOP-led General Assembly have agreed on during the past two legislative sessions. And that includes so-called "sin" taxes on cigarettes, alcohol, and the like.

At a recent stop in St. Louis, Nixon expressed his opposition to raising the state's cigarette tax. "Missouri voters have twice rejected that in recent years," said Nixon. "There may be a time in which some groups want to push that forward and if so, it'd be interesting to look at."

But the governor indicated that's not likely to happen any time soon. A few House Democrats tried this year to persuade the majority to consider raising the cigarette tax. For the past two years, Jamilah Nasheed of St. Louis has sponsored legislation to boost it from 17 cents to 33 cents a pack. "The first year, it got a hearing," said Nasheed. "And the second time that I sponsored the bill, they didn't even refer (it) to the committee."

And during the final days of session, fellow Democrat Mary Wynne Still of Columbia pushed for a cigarette tax hike by adding it onto a separate bill as an amendment. Her measure would have raised the tax by 12 cents a pack. But she never got the chance to present her amendment, as she was not recognized by the acting Speaker of the House the day before session ended. Proposals to raise any tax in Missouri have to withstand the scrutiny of the Hancock Amendment to the state constitution, which includes a provision requiring voter approval of tax hikes.

And as Nixon noted, Missouri voters have rejected two attempts in the past decade to raise the cigarette tax. Republican House Speaker Pro Tem Bryan Pratt cites that as reason enough to leave the state's cigarette tax alone. "If it increases revenue by a certain amount, and that changes every year with the Hancock Amendment, it would have to go to a vote of the people," said Nixon.

But Nasheed contends her proposal would not have required a statewide vote. "If the increase on taxes for tobacco is at $90 million, then that's below the Hancock Amendment," said Nasheed. "And so if that being the case, we don't have to take it to a vote of the people."

The one unknown factor will be the influx of new lawmakers who will replace those leaving this year because of term limits. Will they be more open to raising the cigarette tax?

"I think it's probably more likely in a non-election year than an election year, and I believe that there is some evidence that that is the trend," said Marvin Overby, a political science professor at the University of Missouri - Columbia. But there's no guarantee that 2011 will be any different than 2010. Overby suggests lawmakers who are subject to term limits may tend to focus more on the next election.

Reference: Raising cigarette tax difficult in Missouri, Marshall Griffin, St. Louis Public Radio, 6/8/2010.

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